Is PDF Solutions (PDFS) an EGC that Provides Exposure to the AI Infrastructure Buildout?

Brown Capital Management, an investment management company, released its fourth quarter 2025 investor letter for “The Brown Capital Management Small Company Fund”. A copy of the letter can be downloaded here. In the fourth quarter of 2025, the Small Company Fund (Investor shares) fell 1.50%, behind the Russell 2000® Growth index's 1.22% gain. Real estate and telecommunications businesses led the benchmark's performance for the quarter. The Fund was down 11.46% in 2025, significantly lagging the Index’s 13.01% return. The firm’s investment decisions are driven by company fundamentals, and its holdings performed well in terms of revenue and earnings growth in 2025. Please review the Fund’s top five holdings to gain insights into their key selections for 2025.

In its fourth-quarter 2025 investor letter, The Brown Capital Management Small Company Fund highlighted stocks like PDF Solutions, Inc. (NASDAQ:PDFS). PDF Solutions, Inc. (NASDAQ:PDFS) is a software and engineering company that specializes in advanced analytics solutions and data management for the semiconductor supply chain. On February 20, 2026, PDF Solutions, Inc. (NASDAQ:PDFS) stock closed at $32.43 per share. One-month return of PDF Solutions, Inc. (NASDAQ:PDFS) was -4.56%, and its shares gained 44.39% over the past 52 weeks. PDF Solutions, Inc. (NASDAQ:PDFS) has a market capitalization of $1.281 billion.

The Brown Capital Management Small Company Fund stated the following regarding PDF Solutions, Inc. (NASDAQ:PDFS) in its fourth quarter 2025 investor letter:

"In the quarter, we added four companies to the Fund—AvePoint Inc. (AVPT), Loar Holdings (LOAR), PDF Solutions, Inc. (NASDAQ:PDFS) and Veracyte (VCYT). PDF Solutions provides end-to-end data analytics, machine learning and equipment connectivity solutions for the semiconductor supply chain. This industry serves several critical end markets, including foundries, integrated device manufacturers (IDMs), fabless semiconductor companies, outsourced semiconductor assembly and test providers (OSATs), equipment manufacturers, and increasingly system companies that integrate semiconductors. We believe that PDF Solutions is an EGC that provides exposure to the AI infrastructure buildout. The company saves time, money and headaches by turning petabytes of manufacturing data into usable information to improve productivity. We expect 20%-plus revenue growth and continued operating margin expansion over the next three to five years."

PDF Solutions, Inc. (NASDAQ:PDFS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 15 hedge fund portfolios held PDF Solutions, Inc. (NASDAQ:PDFS) at the end of the third quarter, compared to 20 in the previous quarter. While we acknowledge the potential of PDF Solutions, Inc. (NASDAQ:PDFS) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered PDF Solutions, Inc. (NASDAQ:PDFS) and shared a list of best rising tech stocks to buy. In addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.